Amazon INNOVATES. That's the thing you whiners don't understand. They're not dominating because they undercut you on price. Price is just one way to please customers. Service is another. Value is another. But the biggest one is technology.

Anyone can sell for cheap. Not anyone can single-handedly jump-start the digital revolution. Not everyone can create an online store that is not only a pleasure to shop at, but where it is fun to spend time.

Amazon is going to eat you all for lunch because they aren't thinking about how to make money tomorrow. They're thinking about how to make money in 2018.

They're doing all the stuff you never did--hell, they're doing stuff that you never even thought of. They're all about pushing it forward. They're all about gathering and analyzing data. They're all about challenging themselves to do better, to focus on the future, to learn from the past. They're all about pleasing the customer (and I heard from no less than half a dozen Amazonians that they consider authors to be their customers.)

They experiment. They change. They evolve.

Are they perfect? Hardly. Show me a business, no matter how tiny, that is perfect. In fact, show me a person who is perfect. We all make mistakes as we strive to better ourselves.

But when Amazon makes a mistake, they own it. They don't compile mistake upon mistake until an industry is satisfied with an 80% return rate for books and a maximum of 17.5% royalties for authors and a $35 price tag for the new Stephen King.

TOTALLY agree. I say either we are architects of the future or we are ARTIFACTS. The winners circle is a no whining zone and I love that you say it how it is. The truth is what sets us free and sometimes the truth sucks...but facing it, owning it and making a plan is the path to victory. Thanks for taking the time to share your wisdom.

All so true it's almost scary. Bookstore conglomerates and the Big 6 conglomerates whining about another company using big business tactics is just to ridiculous. And small bookstores cutting off their nose to spite their face is pathetic. As for the ABA, when were they ever on the side of writers? I think the answer is never.

They may whine their way right down the toilet and it will be their own fault.

Ever since I read Who Moved My Cheese?, I've tried to increase my personal incidence of noticing that things have changed and proactively embracing the change. One day I'd like to be one of those who get ahead of it a little. One day.

Glad to hear Amazon is still listening to customers (and, as a KDP author, I have felt like they considered me a customer).

Awesome post, and probably my favorite, I was just saying this about Amazon to several of my friends this last weekend. Amazon is going capsize the whole stagnant industry and clean house. The winners are going to hang on and the rest... well, they will sink.

I sort of feel like a partner with Amazon. Amazon makes money but so do I. Without Amazon, I have no way to access the people who decide they want the book I have for sale.

I feel like the cut Amazon takes is more than fair for the "services" Amazon provides me as an author by making my book available to the reading public, collecting the money, delivering the product (mine) and then paying me.

I don't see any of the Legacy publishers lowering themselves to create a win-win business arrangement for authors, readers/customers AND the business (Amazon). Everyone wins, most of the time, in this situation. Well, except for the whiners.

Amen! Amazon certainly isn't the enemy, at least not to authors, that's for sure. Without Amazon, I'm still toiling away at a day job thinking about "someday." With Amazon, I'm a self-employed writer 10 years earlier than I expected to be--with kids heading for college no less.

I recently shut down an "Amazon is to be feared" conversation on a self-pub loop I founded because I'm not interested in that kind of discourse. Amazon changed my life, and many other lives because they think outside the box. When they are considering a new program, they call me and ask me what I think of it and seem to take my feedback seriously. I've never been treated as a "partner" in the publishing process before I got into business with Amazon. Anyone who is making money as a self-published author owes Amazon a debt of gratitude. Sure, we owe other retailers a debt of thanks, too, but Amazon was first as they will continue to be because of their forward-looking approach to this ever-changing business.

I've only published with Amazon on KDP, so that makes me just another vendor. But I have kept an eye on some of the authors who publish with one of Amazons imprints, and they all seem happy, especially the ones who left the big 6 and have a better understanding of how the publishing world works.

If I had a choice between the big 6 and signing with Amazon, there is no way I'd go with the big 6.

"(and I heard from no less than half a dozen Amazonians that they consider authors to be their customers.)"

Amazon has proved itself superior in EVERY way in serving the customer (that's me). They satisfy me, cater to me, and on the rare occasion when I had a problem, they solved it so quickly I didn't have time to even THINK about formulating a complaint.

As a supplier (writer) it boggles the brain to imagine any company would value me as much as they do their customers. Wow. That is very good news indeed.

Professionals realize that you either put up or shut up. Whiners consistently forget when you point a finger in blame, they have four other digits pointing right back at them.thanks for another great post!

Great post. I feel a new sense of excitement for writing because I am no longer a captive to the agent/publisher slush pile. Amazon freed me, and I know with that freedom comes work, effort and the need to be as innovative as they are, but I am up to the challenge because this is a game I can win. How do you win against slush piles? I left a blog I was following because they could not see passed traditional publishing. Blah. Tanks Amazon and Konrath for making things possible.

I don't have much/any sympathy for writers who worry about the future of publishing. The future belongs to the writers because they're writing the words. Amazon has recognized that and is breaking the process down to make it more accessible for everyone.

Basic concept taught in business school and a warning that many successful businesses fail to heed when their dominant position ought to make it easy to remain where they are (easier at least than getting there in the first place:

Complacence is usually the reason a business loses its dominance to another, rather than competition.

I agree! I can't wait to see what Amazon does next. Expanding Prime to have multiple lends per month (or per day) would destroy the public library system, AND the authors would get paid for every borrow.

@Todd - And I wouldn't be surprised if the next business Amazon destroys is Netflix along with Sundance film festival. Once indie filmmakers are able to make their films available for $.99 or for free, why would they need a film festival, or even a big studio to give them the chance at a meager theatrical release?

Amazon is such a small part of what's wrong with the publishing industry that it's not worth my time to bother with them. The "archaic" return policy, as it was called above, is actually the only problem. Invented by Simon & Schuester (and later adopted by the other larger publishers of the day) during the depression to keep bookstores (publishers only source of distribution) from going under, that's the real culprit. It only works for large publishers and not at all for small publisher or self-pubbed authors. For those who say Amazon will destroy them . . . HA! Amazon will destroy themselves before that happens. And I can't wait. ;)

You're exactly correct re: innovating and experimentation. Amazon takes risks when an opportunity shows itself. Until recently the publishing industry has mostly avoided risk and new ways of doing business.

Is Amazon a bully? Sometimes. Do they get to dictate everything about their business? No. Will they destroy publishing? I actually don't think they will. Eventually, market forces will halt their increasing dominance through diminishing returns while opportunities are created for smaller firms. The publishers may even get some sense along the way and start to innovate as well - not to mention the book sellers.

Shameless plug or not: I spent a lot of time researching this idea and posting about it myself. I don't write much, but I have a lengthy post on this and what can be done about it (for the publishers and book sellers).

I compare the frothing-at-the-mouth despair over Amazon's dominance and possible outcomes to past juggernauts like Microsoft, Kodak, and AT&T.

@Todd: From what I understand, Amazon certainly plans to go after film etc. next. I am very glad to see it, personally. As someone who is in small independent film projects, I really am tired of studio money calling the tune for the same ol same ol.

As for publishers: What mystifies me is how backwards even small presses are being. One specialty press "rewards" its authors that sell a certain number of print units by also offering these titles via eBook - with nowhere near the kind of dividends that Amazon currently pays on its eBook offerings to authors. There is a gathering of various authors, publishers, etc. in San Jose, CA all of this week. I wish I were there to ask some very pointed questions about how they forsee the future of serving their readers better. I think there would be some very revealing answers.

The publishers' return policy doesn't work at all, for the publishers or the authors. And I doubt that it did a whole lot for book stores. For authors, it's fatal. It means that you slave over a book for a year, slave another three months getting it into print, promote it like mad for another month, and the stores are already busy sending all copies back to the publisher as soon as the first month (and any promotional money from the publisher) has run its course. At that moment, the book dies. And the author's royalties are held in reserve in case a few books haven't made it back to be pulped.That policy is the single culprit in killing a series before it gets started.

As for the reaction of big-name publishing to the explosion of electronic publishing: They do everything they can to hold on to the contracts they have in order to exploit the ruinous arrangements for royalties and to fight Amazon. How do I get my books back?

As for Amazon being author-friendly: I do wish I could communicate with a person.

Tell me how much the average self published author makes without a marketing machine behind them Konrath...

Joe sez: A shitload more than a legacy pubbed author makes without a marketing machine behind them. And for the record, there is no marketing machine behind my self-pubbed titles. Just luck and knowing how to play the game with the tools given to me.

The "archaic" return policy, as it was called above, is actually the only problem.

Not even close. It's one problem of many. Ridiculous overhead, terrible sell through, low royalties, poor decisions, below average ability to pick hits, outsourcing, distribution, shipping, ineffective marketing, outrageous wastes of capital, terrible relationships with retailers, and a complete and utter fail when it comes to ebooks--and there are many more.

"Once indie filmmakers are able to make their films available for $.99 or for free, why would they need a film festival, or even a big studio to give them the chance at a meager theatrical release?"

I worked on indie movies for ten years. The difference between books and movies became clear to me in the late 90s when I wrote something along the lines of 'a large black jeep bounces across a field full of cows' and then a few months later found myself standing in the back of said jeep with a Steadicam trying not to fall over the side as it bounced over said field while the driver tried not to hit said cows.

You can write and release an e-book novel for $0.00 by investing some of your own free time, but even if you manage to make a movie for $0.00 by borrowing everything that you need, it still requires a large investment of other people's time. The cheapest movie I worked on that actually looked reasonable on a cinema screen cost about $20,000 and that was without paying any of the actors, crew, etc.

So it's a very different market to e-books. I'm sure you could make a movie for $10,000, release it at $0.99 with a 35% royalty and make your money back from 30,000 sales/rentals, but you still won't be able to pay the cast and crew for their time. If you pay them as little as $10 an hour and shoot the movie in two weeks you're looking at another $10-20,000 on top.

Realistically, if you want a movie that looks competent where you pay everyone and pay for your equipment, locations, etc, you're well into a six figure sum. If you want a name actor who'll bring people to the movie and you're not related to them and don't have incriminating photos, you'll probably need at least seven figures.

Now, I can see in the future with faster computers and virtual actors that a single individual could make a decent movie for a small amount of money without requiring anyone else to help. But 'Hollywood Studio for Windows' is probably still a couple of decades away.

Well done. Yes, I like Amazon, they give me opportunities and exposure. Why would I want to align myself with a an industry that spends it's energy trying to hold back change (It didn't work for Canute and the tide after all).

I found your site via an author on Gather and have learned so much from you--thank you! What you have been saying in regards to e-readers stretches across any aspect of life that includes writing and books, whether it be school, reading for enjoyment, teaching, or Bible studies. I was listening to a Chicago Christian radio station (90.1 FM) and the guest being interviewed said that when he questions an audience as to what one word comes to mind when they think 'study,' those older than 25 say 'books.' Those in the audience under 25 say either 'Kindle' or 'computer' . . . hmm. Is not this what you have been saying? We need to change, because the upcoming generation is already there.

Amazon innovates for the future, while the Big 6 can't see beyond next month.

Example: at Bouchercon this year, I asked a New York publisher why he doesn't leave New York and escape their high taxes and crushing real estate costs. That right there would add $$$ to their bottom line, enabling them to invest in new authors and new technology.

His response: New York is where the business is.

In other words, everyone else is there. The other 5 publishers, the agents, and the printers, so why should I leave? Besides, I love New York. I do the Times crossword puzzle, I go to plays, I love all the trendy shit, blah, blah, blah.

You're right, Edward, it costs much more to make a decent movie so it's not as easy to make a profit as it is with ebooks.

But to paraphrase Joe, emovies are forever.

Make them cheap enough (and your namesake Edward Burns is showing how that can be done) and distribute them Video On Demand, for immediate streaming to your TV or Kindle Fire, for an inexpensive hire fee, and a movie can make a lot of money back.

If a company like Amazon were willing to offer the same kind of percentage to filmmakers as they are already doing with authors, making it much more profitable than the likes of iTunes and Netflix, there would be an easy international distribution deal in place for every indie movie released, and your movie is out there forever, not just a week in a handful of cinemas before it quietly dies and goes to DVD rental where it gets another 6 months.

Marry that to a profit share cooperative arrangement on production (not a bullshit 'deferred fee' con) so that every crew member has a stake in the film and its continued residual profits for the rest of their lives, and you've got the beginnings of independent filmmakers finally making a living the way midlist authors are now doing, thanks to Amazon.

I've benefitted by Amazon, though not as much as JAK, and that's not Amazon, that's me. But I do believe in, uh, a kind of skeptical loyalty. Trust, but verify. Monopolies, if this is one, are always vulnerable to abuse.

@Edward - Yes, film is a different market, but consider what the film industry and especially film students could learn from this blog and other self-publishing successes.

Film students raise $3,000-$10,000 budgets to make shorts which go to film festivals... then do nothing. Shorts are in (comparatively) low demand for distribution. Just like in books. It may get them a meeting with a studio, if they're lucky. Democratised distribution like Amazon will provide more options for these students to get their films out (and maybe make some money).

Film does take an upfront investment, (btw, so do books. John Locke invests $10,000 into each of his books for editing, covers, formatting, etc.) but use that as a challenge to keep things low budget, like a webisode or television.

I'm just saying, why not? Especially at such a competitive price ($.99 or $2.99 instead of $10). People always complain about mass market films being crappy. Why not make "little darling" films for niches at low prices?

Stealing a line from Austin Power... Got an issue? Here's a tissue. Amazon is the evil beast coming to steal away your children... hmmm it's the Anti-christ? I love Amazon and honestly if puts the big six out of business... well that's what they get for not publishing my book LOL. Karma sucks!

Thanks for calming some of our fears, Joe. A lot of us rely so much on Amazon to continue promoting our work as Indie authors and we realize they can stop doing that at a moments notice--maybe from pressure by the Big 6. I'm guessing by your meeting, Amazon isn't inclined to do that.

Amazon's approach to destroying their competition seems to be largely a matter of doing for authors what the legacy publishers have refused to do -- put author interests first, knowing that will lead the best and brightest into the fold and make EVERYONE profitable.

The legacy loons just don't get it. They're in a major state of denial.

"Make them cheap enough (and your namesake Edward Burns is showing how that can be done)"

I did a quick Google search and he doesn't seem to have done anything particularly novel; looks like a $9,000 feature with no lights, mikes that will probably have his sound mixer dying of a heart attack before the movie is finished, and no costumes or production design. About the most radical thing he seems to have done is pay the actors for the shoot rather than expecting them to work for free.

People have been making movies like that for years and unless they have a good marketing hook they go nowhere because few people want to watch a home video with bad sound. In his case I'm guessing his name will sell it, but Joe Average doesn't have that option; when Robert Rodriguez made an action movie for $7,000 that was news, now another cheap movie from an unknown director just evokes yawns.

"Marry that to a profit share cooperative arrangement on production (not a bullshit 'deferred fee' con) so that every crew member has a stake in the film and its continued residual profits for the rest of their lives, and you've got the beginnings of independent filmmakers finally making a living the way midlist authors are now doing, thanks to Amazon."

The problem is that you can't buy your groceries with a promise of money in five years. Nor, as a film-maker, do you really want to be hunting down old crew members twenty years from now to pay them their $10 in royalties; in fact, when I was working on indie movies the general advice was to scrounge any money you could to pay cast and crew up front to avoid having to do that.

When I was writing or editing I could easily do that in my spare time while working a day job, but actors and others who work on location don't really have that option. Making a movie at weekends over several months or years is a huge pain, and most people can't go off to a location for two weeks to work on a movie for free more than once a year while working a normal job to pay the bills. Telling them they'll be rich in ten years on the royalties doesn't change anything.

So unless a producer plans to specialise in movies about two people talking in a room, I can't really see how this would be a big improvement over the current system. Sure, a movie no-one wanted to distribute might bring in $100 of rentals through Amazon, but that's still nowhere near enough to repay the cost of making it.

Making cheap movies for fun is fine, but if you want to turn it into a business you have to treat it as a business. And right now, I don't see how the business case works for more than a handful of people who have enough recognition to bring an audience to watch their cheapie rather than the next Transformers movie.

That will only change when you can make an entire movie in your spare time without requiring anyone else to work on it. When that becomes possible, I'll be one of the ones doing it.

I have this to say about Amazon: They just saved my life. After my publisher Penguin terminated my book contract because I uploaded a short story collection, CANNIBAL NIGHTS, on Kindle (editor calling me Traitor! Traitor!)...who came to my rescue? Amazon.

They immediately offered me a contract with a generous advance so I could reimburse Penguin their partial advice of $20K, which they were demanding back, and without which they were holding my novel hostage indefinitely.

Thanks to Joe Konrath's generous advice to me tobe open-minded and listen to what Amazon had to offer, I have contracted with Amazon 's Thomas & Mercer imprint for the same novel, THE SPY-LOVER. (Whereas the Big 6 take 12-18 months to publish a novel, Amazon will be publishing my novel this summer.)

But the mind-boggling thrill, came in actually DISCUSSING my contract with Amazon. The editor actually asked for my opinion on each point, the generous royalty rates, when to release the digital version (before or after paper), production time, the non-compete clause, the global marketing plan.

At each step of the way I was assured they would do everything possible to allow me, the author, creative control. Input on the cover, the title, the marketing efforts.

This is the first time in my experience any publisher has EVER ASKED MY OPINON while drawing up a contract!!! It is unheard of in the Big 6 world unless an author has the heft of Stephen King. (Usually an agent negotiates with publisher, then contract is sent to author, you are allowed a few questions which publisher usually considerS self-indulgent. More often you just sign. Period.)

Amazon is not perfect, there may be future reforms needed as fear of them monopolizing the industry grows, but this is an evolution we are in, a massive tectonic shift, as the world goes digital. MANY reforms will be needed across the board. NOT THE LEAST OF WHICH IS IN TRADITIONAL PUBLISHING.

And unlike traditional publishers, Amazon cares about authors, they listen to our feedback. THEY WANT US TO SUCCEED. My editor is a joy, constantly accessible, articulate, compassionate. He loves books, he even has a PhD. He has a wife and kids.Which abolishes that oft-perceived image of Amazon as a robotic, faceless horde out to control the industry.

Some of my writer friends have called me 'traitor,' and accused me of going over to the 'dark side.' Joe Konrath and Berry Eisler have been accused of that, too. But listen up. We are free-lancers, like most of you. We need to be in control of our future, and put an end to old-time 'ethics' of the Big 6. And mostly, we need to make a living!!! We need to try to secure some kind of future so we can keep producing.

Larry Kirschbaum was for years a highly respected editor in traditional publishing. He was a Major Player. In the past two years Amazon hired him away to head their new publishing empire. Now people in traditional publishing circles refer to him as 'Amazon's New Hit Man.' In fact that title was recently on the cover of a news magazine about Kirschbaum 'selling out.'

My response is this: If selling-out means trying to advance yourself, trying to survive, and along the way help out other writers, then I'm a sell-out. And frankly, I'm happy to be married to the Hit Man.

As media goes, paper books cost too many dollars per hour of entertainment they provide.

The internet, and YouTube, offer as much as 744 hours of entertainment (provided you never sleep) for as little as $20 a month for your ISP bill.

A movie may cost $12 a ticket, but you're paying for more than the movie--you get the venue as part of the package. I can stream unlimited movies on Netflix for $10 a month, or buy used DVDs for $1 each.

TV is $20 to $30 per month.

Music is 99 cents per song, but a song can be listened to dozens, if not hundreds, of times.

A used paperback of a new release is about $3 to $4 (or less), and provides up to 8 hours of entertainment (or more.)

A concert or play or sporting event costs a lot more, but that's a one-time-only event and not comparable to digital media.

So how much is an hour of digital entertainment really worth? Especially when it isn't tangible and costs pennies to copy and deliver?

I'd price it about 25 to 75 cents per hour. That would cover the Internet, streaming Netflix, cable TV, digital music, and ebooks.

Of course, the rules of supply and demand don't apply. Digital media is worth what people will pay.

But tangible media is, in many cases, overpriced. $25 for a new release DVD, or a new hardcover, or $20 for a new CD, is wildly expensive compared to downloads and streaming.

So true, and very sad. I worry about the 'black' side of the Amazon model - like only selling Kindle files DRM instead of including files that every ereader can handle.

I'm sure Amazon is a good example of capitalism at work in a free market - while they are growing. Unfortunately, attitudes change once a capitalist enterprise achieves near-monopoly status. Then it's time to pull up the ladder behind them, and jump on the fingers of anyone trying to pull themselves up. And - yes, inevitably - use your market position to start soaking the customer.

"People always complain about mass market films being crappy. Why not make "little darling" films for niches at low prices?"

The problem is that most of the low-budget indie movies are worse than most of the mass market films. I'm still astonished by the number of people who'll spend thousands of dollars on their movie but won't spend a couple of hundred to rent a decent mike, when good sound would at least have made it watchable.

Now, that's true for indie novels as well, but you don't have to spend thousands of dollars to write one. The cream of the indie movies will still rise to the top, but that leaves a lot of people spending a lot of money to achieve a few bucks in rentals or a few views on Youtube.

Of all the people I knew working on indie movies, only two made money; one followed your advice by making low-budget lesbian vampire movies (and, of course, not paying anyone who worked on them), the other worked on a little thing called 'Blair Witch Project'. Everyone else spent more than they earned, if they earned anything at all; lots had big deferred payment deals but the movies never made enough money to trigger them so they never got paid.

@Edward: But that is the whole issue. Giving good production values are what matters, whether you're talking about a film or an eBook. the phrase "just fix it in post production" is often heard amongst those who have never done anything resembling a professionally packaged product, but you absolutely cannot make a good film with crap footage and sound that cannot be salvaged just as you can't make a bestseller out of something that hasn't been edited or formatted worth a damn.

I don't know what the winning business model will be, but I do know the current model (the all blockbuster mentality in both mainstream movies and network TV) can't/won't survive. There's too much technology and innovation available at an accelerating pace for a monopoly like this to last.

Example: Video games "came out of nowhere" in the last 10 years and have taken a huge chunk out of Hollywood, permanently altering the playing field for eyeballs.

And while the metrics (as David M. Grant pointed out) are very different for Indie Author and Indie Filmmaker, if Amazon or anyone else can devise a viable way for visual storytelling to become profitable for Independents...

...it could actually toll the death knell of "WHITNEY".

Todd

P.S. Who am I kidding? Like six-legged survivors of a nuclear holocaust, there will always be a "WHITNEY"!

Cue laptop editing widely available. Ah you can make your film but no one will see it because the studios control distribution.

Cue internet distribution. Ah, but no one wants to watch movies on computers.

Cue convergence and TV streaming. Ah but there's no point because everyone wants 3D...

On the basis of a 60-second google, you dismiss Ed Burns' new movie because it's *probably* got bad sound and anyway he's doing nothing new?

Come on.

If the tweets I read every day from satisfied viewers are anything to go by, he's got a modern classic on his hands. And the revolutionary thing he's doing? Cutting out theatrical distribution and going straight to VOD.

Ah but you can only make Dogme/Mumblecore movies like that. Cue hordes of laptop directors making spectacular CGI fare for peanuts.

There's always an excuse not to make an independent film but the excuses are disappearing rapidly and there's a new generation of filmmakers who don't care about the limitations. They're getting their films made and they're going to make money out of them online.

And in the one-click movie stream future there's no marketing to push a film. A title alone will sell it if it makes a compelling genre promise.

Much of what's going on in indie filmmaking now was happening in indie-publishing two years ago. The same arguments being knocked down by the reality of a viable indie digital market. I think in a few more years indie filmmakers could be outgunning the studios with their online sales.

I have six books with Amazon (soon to be seven) and my experience has been the same as Kiana's and Joe's. The team listens to me. I get a say on covers, titles, marketing efforts and everything else. I love the business end of things and often come up with ideas for promotion, something that's encouraged and valued. I don't understand why a publisher wouldn't want that kind of partnership with their authors. The dismissive attitude and lack of professional courtesy you sometimes see in New York publishing puzzles me.

Destroying your competition by appealing and offering significantly better deals to the two most important segments of the industry, readers and writers, leaving all the middlemen scrambling for excuses and a much smaller piece of the pie. Funny how that works. Don't treat the only truly indispensable people as afterthoughts and you, too can win at business.

I'm a science fiction fan, and now author. I've been disgusted with what the big 6 did to my loved genre since the 80's, and not-patiently waiting for a smart business to take off the blinders and unlock the hobbles.

I realized that smart business would be Amazon quite some time ago. Basically, it's the same thing they did when they brought out the Kindle first. The big 6 planned to contract the authors already selling books. Now they're whining because Amazon pays more than they planned.

I love Amazon and I love the fact that you are "no holds barred" when speaking your mind. Sugarcoating things never helped anyone evolve. Thing is, Amazon has been better at a lot of things first. I don't just love Amazon for what they do for authors, but just what they do for consumers in general. They are not out to take every dime you have. They give you shop around options. Buy new or used, doesn't matter. They'll make a lot of money in the long run, not all at once and taper off when their popularity dies down. They're steady, reliable and predictable. That, to me, is a better way to run a business.

Your argument would make more sense if it didn't consist of a long list of straw men.

I've worked on a feature made for less than $10 (plus tens of thousands of dollars of equipment loaned for free, thousands of dollars of location fees waived and thousands of dollars of expenses that the cast and crew paid for themselves). It didn't make its budget back because even that's too much to earn if you can't produce a good movie that people want to watch; in that case, despite any other flaws, it was crippled again by bad sound.

When 'El Mariachi' was released it was going to herald a new era where Hollywood would tremble in fear at the new breed of indie directors, but... it didn't, because ultimately there's a quality level you can't drop below if you want people to watch your movie rather than Transformers.

CGI is helping to lower the cost of reaching that level, but it still has a a way to go before anyone can make a movie for $0.00 and find an audience. Yes, someone can make a good movie about two people in their basement for the cost of some pasta and a hard drive, but thousands of people can't make a career out of it.

I'm not whining about Amazon's success at all, power to 'em if they are doing well. However, in the long-run I am concerned about the possibility of Amazon becoming a monopoly. Especially since authors are crap at representing themselves collectively.

I understand the lure of Amazon to the writer. I have five novels published, all with the big six. I'm tempted by the Amazon model. But to those of you who think that the publishing world will be better without the big six, without B&N, small book stores, etc., I think that you're gravely mistaken. Right now Amazon pays very high royalty rates because they are trying to capture a market! If they capture the market (writers) do you think that the royalty rates will stay up around 70%? No way! Amazon will drop its rates big time, and what choice will writers have? Everyone will be publishing on Amazon and everyone will be getting a dumpy royalty rate. I understand that the big six also pay out crappy royaly percentages, but don't think that Amazon is going to be some all-good angel once the competition is gone. Bezos is all about profit. And when the competition is gone, things are going to change with the way that Amazon pays out. Have people forgotten that monopolies aren't good? I've shifted all my online book buying to B&N.com in hopes that competition to Amazon will stay. Competition is good for us all....

I've got my doubts about how good a publishing world with a near-monopoly by Amazon would end up being for us.

But then I look at the stuff Amazon is doing through the KDP select program and other innovations, shrug, and tell people who've complained that I've taken some of my stuff down for the Nook, "hey, when B & N offers me what Amazon does, I'll be glad to work with them again." And I hope they do.

Good post, and I really can't find much about it a disagree with. Sadly.

I too am really tired of the "Amazon is Satan" hysteria, and if "evil" means offering authors the best and fairest shake they've probably ever had in the history of publishing, then tell me where to sign up for my little forehead-horns.

On the other hand, much as I like and admire Amazon, I really don't want them to achieve a monopoly position in media (including book) distribution. I don't mind them being the leader, but they at least need a solid number-two to keep them honest.

This is no commentary on Amazon specifically, just on human nature and human history. Microsoft was pretty evil during the PC era, but things would have been far worse without Apple as a (distant) competitor, and later without Linux as a serious alternative for IT folks.

Without competition, a completely dominate company (or as in publishing, block of companies) has no incentive to treat either its customers or suppliers right. It has no incentive to innovate, and in fact (hai traditional publishing! Looking at you!) will often use its dominate position to suppress and discourage innovation by others. (It's kind of important to realize too, that Amazon has effectively swept in and saved us from a media-stranglehold by Apple, which in the short-term at least, would have been far worse, based on how they've treated their app-culture.)

I'm not sure who our "worthy adversary" for books is though. It certainly isn't coming out of traditional publishing, for all the reasons you've outlined, and more.

Apple will fight them over movies, music and TV, but Apple has never understood books, and post-Steve Jobs, it's yet to be proven that Apple actually understands ANYTHING any more.

Google has the resources to do it, but blew a perfect opportunity with Google Books. Again, they just don't understand books, other than as something dusty than they can digitize and use to generate ad-clicks.

The best candidate would seem to be Barnes & Noble. But Barnes & Noble has never fully embraced indie publishing (see some of the above comments) or understood its long-term importance.

And Barnes & Noble doesn't have the deep-pockets to lose money short-term to make money long-term, which is a fundamental part of Amazon's culture. Perhaps they'll be acquired by someone with deep-enough pockets, and enough vision, to take Amazon on for the long haul.

"Deep pockets," "vision," and "an understanding of books" though, that's a hard trifecta to find (see Google above, which has two in aces, and a third seemingly not at all).

Anyway, I hope somebody out there will emerge as a viable alternative, for Amazon's sake as well as our own.

It's wise to trust but verify with anyone you do business with--but can the doomsayers explain exactly how Amazon the Monopoly can force writers to serve them? I can sell my ebooks directly from my own site. Sure, it will be more work to get the word out but it can be done. Amazon didn't make all of you come here and read this post, did they?

While this may seem a good thing, unfortunately the stock market isn't looking at it like that. According to Bloomberg, Amazon's stock is at a tipping point and beginning to seem hugely over-valued. Even after a drop of close to 8% in the share price investors look like getting a return of 0.7% from their Amazon stock. In a rush to secure market dominance, Amazon has been losing money hand over fist(be it from the new kindles which are sold below cost, the free shipping, or the huge markdowns of best sellers), and investors are scared. From somewhere Amazon is going to have to cut costs or increase revenues, and that may effect us all.

KDP, or self published authors, are basically vendors who sell their product (their books) on Amazon. They are not published by Amazon.

The royalty for these two groups is different. With KDP it's based on the price the seller/author sets for their product. With the Amazon published author, the royalty is based on the terms of the contract.

I LOVE THIS! Amazon has been amazing! They listen and adapt, repeatedly, and they are available 24/7. They are about as customer oriented as any company I have ever worked with, no matter the industry. Thanks for saying it like it is.

Remember the days when indies got 35% Then the Big 6 came along and set up the agency model and a corresponding threat of refusal to sell, which netted them 70%. Amazon caved in, then got the indies on a parity schedule. Indies were riding the coatails of the big 6. (No don't thank them, just bash 'em).

If the big 6 go, and there's no one to keep Amazon in check, well ... you do the math. In the history of mankind, monopolies have NEVER led to a bigger, greater future.

Umm, no one is locked into Amazon other than a few with publishing deals with the Amazon imprints. If a competitor like B&N or some other site offered 75% royalties tomorrow a ton would put their books there.

Amazon doesn't have the lockdown of distribution and never will that the Big6 had through bookstores and distributors like Ingram in the past.

Will Amazon change? Yeah, no company culture is static. But they can't monopolize things because they can't control distribution even if they turn 'evil' and try to screw authors.

Anonymous said... Remember the days when indies got 35% Then the Big 6 came along and set up the agency model and a corresponding threat of refusal to sell, which netted them 70%. Amazon caved in, then got the indies on a parity schedule. Indies were riding the coatails of the big 6. (No don't thank them, just bash 'em).

If the big 6 go, and there's no one to keep Amazon in check, well ... you do the math. In the history of mankind, monopolies have NEVER led to a bigger, greater future.

Umm, the Big6 were using their monopoly to force Amazon to charge more to consumers. Since most of us are also consumers yeah few of us are happy that they drove up ebook prices, in some cases higher than hardcover prices.

There's antitrust investigations in Europe against the Big6/Apple for it and a lawsuit in the US.

Coming monopoly or no coming monopoly, all I know is, the numbers don't lie. New York slammed every possible door in my face. And when they were done, they opened those doors, then slammed them in my face again. With New York, I have sold precisely 0 books. With Amazon, I have sold quite a few more, and I'm just getting started. Even 1 book is more than 0 books.

Yup, and this goes for some authors as well, who I find aren't supportive of each other with their traditional vs. self-published mentality. All I know is while some local authors are looking down their noses at my self-publishing forays, at least I'm getting more than query letters read.

Joe, Love this! Anyone who's been in the traditional publishing world, any author, has probably wondered about a dozen or more aspects of the business that don't make sense or are just ridiculously unfair. The only concern I have is that Amazon, after sundering all of the above, could become another form of the same evil, screwing authors left and right. Why would they do that? Money, power? I dunno. Hope it doesn't happen.

For what it's worth, and off topic, I worked at Amazon and it sucked. So I quit. They are so into metrics, it's ingrained in everything they do and was annoying as hell. They're a huge company and I get it, but it still sucked.

The managers probably even measure their penises. "Hmm, Jeff. How can we stretch this out a bit?"

I'm so sick of companies fighting change, especially technological change. I don't /want/ amazon to dominate and be the only company. I don't /want/ them to have a monopoly, but other companies are working so hard to fight technology and consumer demands that its just become inevitable.

Joe is certainly whining about whiners, but somebody has to. I love it!

Reading this made me wonder why more agents aren't innovators. Why can't they reinvent themselves and help with self-publishing, cover design, etc? I mean, truth be known, most writers would love to write and have someone else do the packaging and marketing. We just don't want to be ripped off doing it.

So...I couldn't help but notice....When chain retailers are complaining that Amazon is going to put them out of business...Wait? Did the big chain book retailers have a part at putting some smaller indie bookstores out of business?So...it's okay when you do it to someone else but then when you're on the receiving end it's "unfair business practices"?

And the great thing is, if Amazon does get too overconfident and turn into the ogre some people fear, then they too will get destroyed by a leaner, meaner predator (smashwords or B & N or maybe even an idea that's currently just a twinkle in a future entrepeneur's mind). Future looks good for both readers and writers.

Hey Joe! How long do you think some of the old school authors will be able to sell their fiction books for $12.99 to $14.99 on the Kindle platform? Makes no sense to me how they are sticking it to the consumer.

While the Chain stores may have used their buying power and (at the time) deep pockets to get and give discounts on stock and be able to offer a wider selection of stick. This is obviously something Amazon does too, trumping them at their own game.

What Amazon is doing that big retailers never tried(or could have got away with) is locking in exclusive rights deals and enforcing contracts that don't allow discounting in other places.

This is one of the problems with blurring the lines between retailer and publisher and to tell the truth I would be surprised if someone isn't looking seeing if they are breaking any anti-competition laws with these practices.

dI would like to understand one point. Joe - you say you don't have a marketing machine behind you - but Amazon markets your titles - your self pubbed ones and the ones they publish - why do you say they don't? Amazon is perhaps the most powerful marketing machine any author could have. One press of a button and they can promote your book to millions of readers. I've gotten emails from them with your self pubbed books in them. That's marketing and marketing any author would kill for.

Regarding the film discussion--there's already plenty of examples of profitable "indie" film on the internet. It's called "porn" and the production values can range from awful to top notch. A heckuva lot if it is making a profit, though. I suspect there are lessons for mainstream film to learn if they pay attention...

Many worry about monopoly, but is Amazon heading toward monopoly in the traditional sense, or are they in fact a cyber-version of the old market bazaar, where all are welcome to come and peddle their wares, and set their own price (ok, as long as it's over 99c and with the market owner getting his cut)?

I'll make more money from 1 ebook this month than I've made from 9 ebooks in 5 months--thanks to Amazon--and I'm not talking pennies, I'm talking thousands of dollars...from 1 ebook...because of Amazon.

How long do you think some of the old school authors will be able to sell their fiction books for $12.99 to $14.99 on the Kindle platform?

Bestselling authors can command higher prices and still sell well. Midlist authors are getting screwed by high prices.

As paper sales dwindle, the current crop of bestsellers probably won't make the transition to digital bestsellerdom if the ebook prices stay high. I believe much of being a paper bestseller depends on distribution, and those sales bleed over to ebooks. But when paper books have very little distribution, I believe many "name brand" authors will be forgotten.

Well said! Enough with the blame culture. eBooks have been around for over 10 years. I know since I was one of the first to have ebooks available through Amazon before they came up with Kindle. Amazon has been building the infrastructure for ebooks for a long time, and we all knew digital was going to happen. Look at cable television. Look at the internet. Other book retailers and publishers cannot say they are surprised by this. They had over a decade to work diligently on it, but didn't. Meanwhile, Amazon had always looked towards the future, despite what the naysayers said. They didn't keep their heads in the ground and continue publishing as it is, but became part of the innovators. Amazon shouldn't be blamed for bringing about the ebook revolution. They didn't invent ereaders first - there was the Rocket eBook Reader first, but they didn't do so well because lack of ebook content. What Amazon did was made ebook content cool and getting ebooks loaded to a thin handy ereader cool. And as they have been doing since they first opened their doors, they are able to reach publishers and authors the best. It's only natural that the publishers and authors they've worked with to get print books are also the ones to first provide them with ebooks, too. Amazon already won in this way because they had this relationship going into the digital revolution. They are also good at maintaining this relationship. Look at me.

I've worked with so many book industry people, and Amazon has consistently listened to and responded to what I had to say. The people I personally have contact with at Amazon are great to work with and so down-to-earth. They are a pleasure to work with and to hang out with as people.

Amazon plays a big part in my success as an author - I've had many bestsellers and last year was a stellar year where I went head to head against large publishers' YA books and ended up selling in the six figures and more.

What many people don't realize is that Amazon offers people freedom...and the ability to bypass gatekeepers. That's not to say every book will be a success, but at least there is a chance for anyone to be able to have that chance to see how the marketplace will react.

I'm trained in Economics, and I've been watching this Amazon-Big 6 situation unfold the same way I think a doctor watches poor sanitization cause infection, just nodding "well...ayup...".

What I can't understand, for the life of me, is why, at THIS POINT, the Big-6 don't adapt. They've lost primacy over distribution, but they still can do their other major function with value to the market. They can do the covers, and editing, at a skill-level most others can't match.

All they gotta do is brand identification for readers. Slap a logo on the book that readers can recognise and say, "Oh, I liked that one book, I'll check this one out too, the books with those little logos are always good...".

Frankly, I'd like to start something in this manner, like "quality assurance" model for publishing, but I don't have the experience. What kills me is, THEY DO.

But, I guess that would force a lot of cuts and a lot of work.

Classic human weakness, and we all have it to some extent -- when faced with drastic upheaval, we do the deer in headlights thing.

With all due respect Joe - and we're friends so I'm not trying to rile you up but I am confused by your comment - "draw your own conclusions" - Amazon sends out emails selling your self pubbed books - how is that not marketing? I have been in advertising my whole life - direct marketing is marketing. Its nothing else.

Joe sez : "According to Wikipedia, a monopoly is an entity that has the power to exclude competitors and raise prices.

Amazon can’t do either.

Authors set their own prices, remember? And last I heard, anyone who wants to can sell ebooks."

Sorry to bring a discordant voice, Joe. I love your blog and what you do for authors.

But Amazon has the power to take control of the price. I just experimented it. I am a French author. I sell about 50 or 60 ebooks with Amazon by month on the french Store, and I find it great.

But I just had a distribution problem with Smashwords : they distributed my ebooks on the Fnac.fr website with a price lower than on Amazon. I did not allow it.

Alas, Amazon, took the control without any authorization from me and lowered the price of one of my ebooks.

You're going to tell me that's not Amazon problem. That's Smashwords and la Fnac and mine. You are right. But they can take control.

And they can also exclude competitors : by inciting indies to go exclusive, with KDP Select. They hurt their competitors like Kobo or Apple doing so.

You will tell me, it's the business. It's only for three months. But readers deserve to have your ebooks on other devices than Kindle.

And you have to think about readers who don't have a Kindle. 2 American from 3. They want to read you on paper. That's what John Locke did by concluding a deal with Simon & Schuster. But he remains an indie. He keeps his rights on his ebooks and even on paper ! I find that great.

As authors, we have to think about all our readers, not just the ones who are connected. It's not the easiest way, I know. Like you, I hate the traditional ways of the paper (returns, etc.). But we have to accompany our readers, not impose them our views.

I'm not in a position to negotiate a deal like John Locke did. But perhaps you are, Joe.

Monopolies will be broken one way or another, often they just dinosaurize themselves out. Amazon will lose it's status, but when and how, we know not yet. And they are much more difficult to compete against, because as Jeff Bezos says, doing business with low margins is a part of their DNA. So they are ahead in thinking.

Oh, I'd love to be involved in visionary discussions within the future competitors, just as much as within Amazon...

For example, I'm too lazy to web search for ideas on just what the Kindle microphone has been thought to be used for. Perhaps something similar to Google Voice, pre-technology that could be used as a stepping stone to speech-to-text recognition? Saves all this typing, you know. :)

re: Joe on pricing, I think the value-per-hour-used is an excellent guide on how to price e-books. If someone's willing to use 10 hours on a (good) book, I think it's reasonable to charge a good amount of money for that! At least when most of this 99-cents-or-free stuff evaporates.

@ M. Alan Spade/Emmanuel Guillot: C'était interéssant, votre bilan. I wish I knew when Amazon/Kindle prepares to launch here in Finland, because I could help them!

You will tell me, it's the business. It's only for three months. But readers deserve to have your ebooks on other devices than Kindle.

And you have to think about readers who don't have a Kindle. 2 American from 3. They want to read you on paper.

Alan, I disagree. I think Americans just want to read books from their favorite authors, period. I think the medium is less important than you think, but obviously it's moving very quickly to digital.

I've been a Nook guy from the ebook start, but since the majority of Joe's ebooks are DRM free I have the freedom to purchase them from Amazon and still read them on my Nook after converting. Doesn't take long and it's well worth it to me.

Or, when I'm feeling lazy I'll just read my Amazon purchased ebooks on my iPhone using the Kindle app. This is what I've been doing with a few of the free books I acquired during the 'big kindle boogie' promotion Joe just got done with. My iPhone is always with me, so when I have down time I can start reading very quickly.

I’ve been wondering why Amazon Publishing bothers with the print editions, because they seem to focus their marketing mostly on the Kindle versions. And I read that their paperbacks don’t sell a lot of copies. Saturday morning I got out of bed to check my rankings, which had been dismal lately because I’m between releases, with the next one coming out in April from Thomas & Mercer. I thought I had accidentally clicked on one of Connelly’s books, because the rank I was looking at was #54 in the paper book store for ASHES TO DUST, priced at $8.37, which was released more than six months ago. Here’s the proof: http://rexkusler.blogspot.com/

This morning, I found this fan letter: "I just wanted to tell you that I was disappointed (after the initial surprise wore off) that you were unable to find a printer for your latest mystery and short stories. Solely because of this, I’ve just purchased a Kindle and naturally, all of the e-books and stories from Amazon that I didn’t already own of yours on paper. I bet I’m not the only one who has done so out of love for your work!"

I take this as proof that Penguin will be sorry in the long run. Evidently, all those midlist authors they got rid of are now helping the Amazon revolution against big publishing.

Kailin Gow said: What many people don't realize is that Amazon offers people freedom...and the ability to bypass gatekeepers. That's not to say every book will be a success, but at least there is a chance for anyone to be able to have that chance to see how the marketplace will react.

This is the key, IMHO. For example, I have a short story that I just published on Amazon and B&N. It cost me zilch to do that. Only a little time and effort to put together a cover and description. The alternative would be to research the market and find magazines that publish this type of story and submit queries - if I could find any publications. Another option would be to market it as part of a short story collection. I would not want to do either.

But with the current options for self-publishing, I can get the story out there and see what happens. It may sell enough to make me a little money or it may not. But it was earning nothing as a file on my hard drive that hadn't been accessed in years.

BTW, I'll provide a free PDF to anyone who will post a review on Amazon and/or B&N. Just send me your email.

@J. Eathen SatterwhiteMany people who hate the winners like MS and Apple don't hate them because of their success, they hate them because of their evil acts. Their success is not legitimate because it is not obtained by fair competition. MS for one has committed numerous crimes (and I mean that literally).

@Jussi Keinonen : by the way, I have also translated on my blog part of the dialogue between Joe and Barry Eisler : "why are publishers relevant, in the opinion of Hachette (HBG)". http://emmanuelguillot.over-blog.com/article-pourquoi-les-maisons-d-edition-sont-pertinentes-selon-hachette-91917370.html

History is replete with examples of governments, industries and organizations that chose to believe that nothing would ever change the lofty positions they held. Innovation, invention, improvement all proved them wrong. Thanks for the reminder. And I really dislike whining...

I do not agree, for example, that publishers don't innovate: every time they create a bestseller they innovate, where did BookScan spring from if not through innovation, has he seen The Solar System app

Joe sez: Actually, every time they create a bestseller, it ss luck not innovation. If they could make all books bestsellers, they would. Instead, only one out of five books published by the legacy industry makes a profit (two break even, two lose money) and I've heard a 70% return rate is now the norm. Besides, you can't call a company innovative if they're just doing what they are supposed to be doing: selling books. Amazon inventing the Kindle was innovate. Amazon constantly improving their customer experience is innovative. Publishing has done nothing comparable.

BookScan wasn't a publishing innovation. It was created by Nielsen, a third party company specializing in analyzing data. And if memory serves, publishers despised it at first, because they wanted to keep their sales a secret. It has been my experience, and that of many of my peers, that publishers are notoriously poor at tracking and reporting their own sales.

The solar system app is impressive. It was also created by a third party developer, not a publisher. And for all the technology that Apple advances, their iBookstore is nowhere near as user-friendly as Amazon's.

I think publishing remains a multi-billion dollar industry lead by some of the smartest people in town and publishing in print and online some of the finest writing around (and generally doing this well).

Joe sez: Industries change as technology does, and there are many instances throughout history of companies who didn't weather that change and folded. And being smart doesn't count for much when the decisions being made are anything but. Publishers are treating their readers and their authors poorly, for reasons I outlined in my post, and that simply can't continue forever, especially since both authors and readers now have a choice.

The Big 6 currently publish a lot of good books, but as more authors figure out they can do better on their own, the finest writing will be self-pubbed.

it takes just one publisher to publish one-megaseller, such as Harry Potter, or The Da Vinci Code, orCaptain Corelli, to blow a hole through the theory that one company can ever dominate.

Joe sez: You used Rowling as an example, and yet she runs Potterville.com, essentially becoming her own publisher. What happens when the majority of major bestsellers do something similar?

Publishing has gone from an industry that was 99% print, based on archaic rules and conventions and one serviced by multiple outlets who largely supported what it was about: to one that is at least 20% digital and dominated by one mainly adversarial customer.

Joe sez: It is 20% digital largely because of Amazon. When ebooks outsell paper books (and in many cases they already do) why are you sure publishers will still be needed?

Authors set their own prices, remember? And last I heard, anyone who wants to can sell ebooks.

No, the feared monopoly has nothing to do with prices charged to readers. It has to do with the split between Amazon and Authors.

Amazon is charging authors 30% to use their site to sell books. Those who fear Amazon, think they will squash all the other ebook sales venues and then raise prices to authors, taking 35%, 40%, 60% etc.

But those who fear Amazon need to look at the actual barriers to entry to selling ebooks. Are they high barriers or lines in the sand?

If they are huge fortress walls, then Amazon rules as king of the land. If they're lines in the sand, then Amazon has to be very very careful with authors.

Because if the barriers are low and Amazon screws authors, someone else will come up with a service to deliver ebooks that's a better deal to authors. And Amazon suddenly begins to lose content.

Here's what poses barriers:

- eReaders that lock you into one format- Site loyalty, i.e. user habits of going to one site for books - Technology know-how

Do the millions of Kindles out there lock you into only reading books purchased from Amazon?

Are users going to be super resistant to going to another site to buy books they can't find on Amazon? Are they in love with Amazon?

Are there critical innovations that Amazon does that can't be easily copied?

Those are the types of questions folks should be answering. Not automatically assuming Amazon will ruin life on the planet because they are enjoying the success of taking advantage of new technology that obsoletes much in the industry.

Anon said: "What I can't understand, for the life of me, is why, at THIS POINT, the Big-6 don't adapt."

I don't think they will really try to adapt too much. The way established corporations and industries work is not generally "to adapt" after the bottom falls out of a business model. And that's what happened when big publishing lost their grip on distribution. The decision makers have to decide if they can win, and if the answer is no, they begin to (quietly) look for an escape route.

The high salaried decision makers will ring out as much as they can, apply cosmetics to the collapse to act like it's not happening until it "suddenly" does, and either jump ship or stake out whatever territory might be left over in the aftermath (if they think there is still money to be made). Many of the folks who work for them will suffer if they buy to deeply into the cosmetic illusion.

"They've lost primacy over distribution, but they still can do their other major function with value to the market. They can do the covers, and editing, at a skill-level most others can't match."

Well, that's just not true at all. "Editing and Covers at a skill-level most can't match?" Even if it was rocket science (it's not), the ACTUAL PEOPLE who have done that stuff for years are hirable on a freelance basis. The truth is, besides maybe a big advance and the possibility of extra cache, the only other things the publishing, agenting system truly offers to authors are more mouths to feed. The ones who make the most money are middle men. There is an art to editing as much as an art to design and production - but those people work for a living. You can hire them yourself.

"All they gotta do is brand identification for readers. Slap a logo on the book that readers can recognise and say, "Oh, I liked that one book, I'll check this one out too, the books with those little logos are always good..."

Certain categories like Romance (Harlequin, etc) have always done that. But in general (meaning across the whole spectrum for books) readers tend to follow things like Genre, particular Characters/Worlds, and if you are really good, Authors. No one cares who publishes books. For instance, no one who love Sci-Fi buys a book just because it says Bantum in the corner. Not even a little bit.

"Frankly, I'd like to start something in this manner, like "quality assurance" model for publishing, but I don't have the experience. What kills me is, THEY DO."

I just don't think that's what they do at all. They find stories they think they can sell. And just like the movie industry, it's more and more about the home run or nothing. This way of thinking simply takes the reader out of consideration. Readers like to read a lot of different things. Big corporations like to offer more of what sold last year.

Corporate brand consulting is my day job. I wouldn't say that what you are talking about is impossible, but the bottom line is you're talking about something that publishers (at least the really big ones) don't do. Putting brands into buckets underneath their big umbrella... that would be catering specifically to the mid list reader. I don't think that's a bad idea, necessarily, but it isn't what the Big Six do. In fact it's what they've moved steadily away from for years.

Actually, if you really want to attempt something like that, branding mid list books under a banner and trying to make it recognizable and meaningful to customers, the current circumstances that make do-it-yourself possible, IS your ticket. You have many advantages that the Big 6 will never have. No overhead, a single vision, and the ability to target the mid list instead of the home run... You can do it. But they never will.

@John Brown "But those who fear Amazon need to look at the actual barriers to entry to selling ebooks. Are they high barriers or lines in the sand? "

I agree. I would also like to emphasize the distinction between barriers to "entering" the market and actually "selling." The thing that makes me nervous is that, as a new author with as yet just one book, Amazon might as well already be the only game in town.

Apple and B&N offer distribution, but only Amazon offers the visibility it requires to sell in large numbers without my having to break my back creative promoting. I signed up for Select after 2 months on sale and went from 0-60 (m.p.h. - not books) in a matter of weeks. As a novice who wanted to do everything perfectly, I probably over spent on the production of my novel. But despite the high cost, it turned a profit in 3 weeks after I began using the 5 days free.

The others don't do that. I hope they do someday, because, by the time I have several title available, I would love to feel like there was more than one game in town. It does make me nervous, for sure.

Having read all the comments, I do believe that there's reason to fear one dominant entity which could raise or lower author commissions at will. The obvious antidote to this is for Amazon's competitors, like Overstock and Barnes, to simply offer 75% commission. Or if Amazon changes the royalty rate to 60%, for them to offer 70%. Reality is that business is about competing, and competition will likely keep behemoths efficient. There is nothing stopping an Overstock from entering this space tomorrow, and offering 5% more to authors. Nothing. Nor Barnes. I personally don't think that the proprietary file formats will still be around in another few blinks, either. I mean, I get why Nook wants to capture its audience as much as Kindle, but the truth is that the future is eReaders with SW that will read any format, so in the end it will come down to service to the customers (authors and readers) and price.

Is there a danger of Amazon becoming the great Satan? Sure. And I'm sure its competitors are drooling in anticipation. That's what makes a market, IMO. As an author who's released a dozen books via Amazon over the last 8 months, and will be releasing another 8 to 10 this year, guess what? Amazon is the best deal I can find. When it stops being a good deal for me, I will be looking elsewhere. In the meantime, everyone else can kind of suck it while Amazon eats their lunch. That's what evolution is all about. Oh, and for those worried about monopolies, didn't Walmart also shoulder this worry about a decade ago? And what happened? Are they now more expensive than everyone else due to their dominance? No? Did I miss that? Seems like the monopoly arguments are more "what could happen" than "what is likely to happen."

The Big 6 could still change. But that would require a paradigm shift. And their de facto monopoly over authors (who wanted to make a living at it) is now over. It's amusing to me to hear the cries of "Beware the monopoly" when choice A is a cartel of players who established rules that protected their membership at the direct expense of everyone else - their suppliers (authors) and their customers (readers). Cartels are basically monopolistic, or rather, are mercantilist. And mercantilism is never good for anyone but the members of the cartel.

Wil Wheaton re-posted this and I am doing the same. If you ever wanted a reason NOT to go with a "traditional" or "legacy" publishing house this is it. It really is unbelievable that a writer will be prevented from writing any more stories about characters they created but that a corporate "ghost writer" is taking over. I mean, WTF?http://parafantasy.blogspot.com/2012/02/this-is-utterly-ridiculousi-cant-even.html

@Rocky Cole. The author in question obviously signed a "work for hire" contract and her services were no longer deemed necessary. She didn't create the series, apparently. It was a packaged idea that she was hired to write.

So as much as I agree about the many problems with the Trad Publishing world, this isn't one of them. There is a long history of house writers in publishing, and many writers write for hire.

Had this been a case where the author had created the concept and characters, etc., then the outrage would be warranted.

@Robert Browne. I get what your points are totally, and the writer obviously did not understand what "for hire" meant when she got into this arrangement in the first place.

That said, my gut tells me there is something wrong with the way she is being treated. I go back to Joe's point about publishers treating authors as commodities and not like customers. If they treated L.J. Smith like a valued customer or a team member, they probably could have come to an agreement that benefited both parties.

Of course we are only hearing the writer's side of the story here, but I will say that this is definitely a lesson in understanding what you are signing on for. I think new writers are so thrilled to get a book contract or a publisher that they overlook the fine print. This story is a warning that overlooking the fine print is a bad thing to do in the long run.

Heartfelt thanks for this posting. From the perspective of a traditionally published, multiple award winning writer with a dense backlist and several new books, I couldn't even achieve the courtesy of a return phone call from traditional publishers during a sustained effort.Now, I work with a boutique publisher and am successfully releasing my books on Amazon and at other ebookstores. I can actually keep a roof over my head this go 'round!I just feel like an idiot for not doing this five years ago! So happy to be doing business with Amazon - you're correct - they treat their writers like customers, and that's a far better position to be in than low person on the totem pole when dealing with traditional publishing. And I did that for countless years!Again, sincere and heartfelt thanks - as a long time reader of your postings, I have benefitted from your sass and your insights.:-)Warm regards, Laura Taylor

I recently signed up for Amazon's Kindle Online Lending Library (KOLL) for the minimum 90 days. I had to make The Last Jump exclusive to Amazon for this period so I had to stop selling on Barnes & Noble, Smashwords and Googlebooks. I was not at all sure I did the right thing but the business results are hard to argue with. For the first 2 months I earned more LENDING The Last Jump than I had previously earned SELLING The Last Jump on non-amazon channels. Sure it was a power-grab move on Amazon's part to remove my book from their competition but they backed up that move by giving me (the author) better business results. You can't ignore BETTER just as you can't fix STUPID.

Amazon is not perfect, but they have changed the publishing world. The world of indie publishing is going through a major upheaval and I find it really exciting. As president of the Bay Area Independent Publishers, we have many authors who use Amazon tools, Smashwords and they are publishing and selling their books. Both Apple and Adobe are encouraging digital publishing - more books for more people. Not the old model where you only have six weeks to sell and be counted, but building your platform, finding your audience and growing over time.

Love your comments about "Winners don't whine. Winners keep at it until they win."

I discovered and have since returned often to this site, because I have been told how this Kindle - Amazon - Konrath is a new revolution in publishing. Indeed it is. And, quite frankly, publishing needs a good revolution. There are many problems with the business as it exists now, or has existed for many years.

I have read enough now to see your profound success. I admire your track record and your ability.

However, this Amazon system has a problem. It appears to be entirely limited to that certain family of paperbacks of which the thrillers and romance forms now dominate. There may well be a paperback revolution here, you are the evincing head of it, but please keep in mind that this is a quite limited subset of the material publishers historically provided.

And yet some of us are still wondering how such a revolution could ever nurture and bring about the discovery of a new literature, truly great work - the best kind of work that the written word has to offer, perhaps even some having strong commercial appeal. After much study on this board I personally do not believe it can happen. Publishing is still in a moribund state - indeed, worse than ever, but your revolution provides only the morbid or prurient page-turners while leaving out any and all potential for the best of the art. I'm afraid those of us who dream of witnessing such a breakout to happen must keep patiently waiting and looking elsewhere.

@Alan Spade - Alan, it's not about PROFIT. Indie authors don't make all that much profit. It's about Business! I can now generate enough cashflow to advertise my book on more venues. Which gives my book visibility to more readers. And I have to admit that the ratio of new readers I've reached vs. those I've disappointed by not making The Last Jump avaialable on non-amazon channels is 20 to 1. So I think I improved the public's accessability to The Last Jump by making this move. Having said that, profit is not a dirty word to me. When my book can sustain itself, I can spend more time to finish the next one. Insofar as working for one boss, I agree. I have epub formats sitting there just waiting for Amazon to screw up or for smashwords and B&N to become more competitive in which case I will release those versions to the public. The only one boss I'll work for is me.

@BradfordIf your looking for new literary fiction there's several self published ones in the top 100. Darcie Chan's The Mill River Recluse is 6th on the Top 100 Literary Fiction. I believe its sold over 400,000 copies. I've no clue if its to your taste but likely several of the others are. And they are commercial successes too.

@Rocky Cole Call me a skeptic, but I have a hard time believing a writer could enter into a contract without knowing what a writer for hire is. What did she think when they handed her the idea?

I knew what a writer for hire was long before I became one. I've ghosted work, I've written house novels and I've written my own originals and each project was spelled out clearly before I signed on the dotted line.

Now it's a shame that a writer who was the "voice" of the series could be treated so shabbily, but I have to think there must have been a reason for the dismissal. It seems to me the relationship must have been mutually beneficial. Something else is going on here that we're not hearing about.

Bradford said: And yet some of us are still wondering how such a revolution could ever nurture and bring about the discovery of a new literature, truly great work - the best kind of work that the written word has to offer, perhaps even some having strong commercial appeal. After much study on this board I personally do not believe it can happen.

Why not? Does literature somehow lack quality if it's read from an ereader instead of a printed book? It boils simply down to what is available, not the medium with which it's presented.

"Amazon is going to eat you all for lunch because they aren't thinking about how to make money tomorrow. They're thinking about how to make money in 2018."

To me, this was the most important statement of your post. It explains everything that has happened since Amazon opened its doors.

It's pitiful and sometimes amusing how the publishing industry (authors and publishers alike) reacts to the latest Amazon bombshell. They run around in circles like a disturbed anthill, accomplishing nothing but spreading the hysteria.

I no longer doubt that Amazon leaks ideas like "Gee, maybe we should open some book stores" just to see what will happen. The fact that such an announcement causes a sudden increase in the laundering of pants is testimony to the power they've acquired.

The truth is that every decision is based on a goal that is so strategic that the rest of the industry is actually reacting to symptoms of what Amazon has planned, not the plan itself.

If the publishing industry wants to survive, it has to start out-thinking Amazon, not reacting to Amazon's latest activity. That's where real innovation comes in: acting, not reacting.

In the meantime, I'll keep my rights in my own hands, and my novels out of the hands of the companies who are clearly being bested at their own game.

I agree publishing is way behind and Amazon is innovative. However, I was at an agency that did work for an Amazon partner and everyone at the partner company was TERRIFIED of the people at Amazon. The tiniest error (and I mean tiny) and the partner company would pay dearly and there would be screaming, etc.

You may say that has nothing to do with business, but I disagree. I think it's fine to have high standards, but it's not okay to enforce them that way--especially since no one wanted things to go wrong.

just reading posts today at PW. I love that venerable children's author Jane Yolen is putting her money where her mouth is, so to speak (I mean that with respect) to work for midlist authors by contributing annual awards which will lift quite a few. That's ways outside the old fashioned model of monied single authors and cronies awarding their few favs and each other.

But also, read about 'executive roundtable' promoted by O’Reilly Media executives, and held at Random House's NYC headquarters, the conference called "Tools of Change"... and this is just a bit of what was said: "He {Brian O’Leary of Magellan Media} advocated the creation of a “super” organization that could bring all facets of the industry together to invest in research to find out what is going on in the marketplace and in help to drive change. That suggestion met with some resistance from invited guests. Bill McCoy of the IDBF, said that he would rather see individual companies deal with the issues and Ries agreed, saying he would rather see lots of different digital experiments, while at the same time is publishers was aggressively “killing it” to grab more market share. Others noted that organizations like the AAP and BISG are constrained from facilitating too much collaboration by numerous government laws."

For me, talk time for publishing, is over. Doing is the ticket to ride, whether indie or big 6. Having more conferences is talk, not doing.

Archangel said: For me, talk time for publishing, is over. Doing is the ticket to ride, whether indie or big 6. Having more conferences is talk, not doing.

I LOVE when people don't get this. I recently saw a press release about a conference (not publishing) that said, "The time for talk is over. Now is the time for action! That's why we've created this BRAND NEW conference, to bring together thought leaders in the field who will start a dialog about real change!"

thanksdr.cpe-------------------from Peter Dudley: "Archangel said: For me, talk time for publishing, is over. Doing is the ticket to ride, whether indie or big 6. Having more conferences is talk, not doing."

Peter Dudley said: I LOVE when people don't get this. I recently saw a press release about a conference (not publishing) that said, "The time for talk is over. Now is the time for action! That's why we've created this BRAND NEW conference, to bring together thought leaders in the field who will start a dialog about real change!"

Joe, thanks for the response, a couple of minor things. BookScan wasn't created by Nielsen it was bought by Nielsen: it was created by a company called Whitaker based in the UK which just happened to also own The Bookseller (where I work, and worked back in the day). It was created in collaboration with both sides of the industry, and I'd say, along with dear old Amazon, revolutionised the business, allowing better and sometimes surprising information about what actually sold, as opposed to what publishers thought sold. Sure some despised it, as some despise Amazon, most recognised that it was a necessary evil.On the Solar System - Elements, an earlier app was created by TouchPress alone, but Solar System was a collaboration with 'legacy' publisher Faber who also later published a print edition (I know, go figure). They also collaborated on The Waste Land, perhaps a better example? TouchPress incidentally regard themselves as a publisher btw.Last, of course publishers create bestsellers, each and every day in fact, and do so by investing in a range of authors and a range of books, even if returns are high and profits are low. By removing money from this supply chain you are simply removing the ability of publishers to maintain the diversity of what they do. But heh, I'm not anti-amazon and Amzn adds to that diversity too: I just don't think it helps anyone if it runs over the rest. You misread my use of J K Rowling, she is a good example of where a publishing business has done good, but couldn't evolve quick enough to meet her ambitions. You see that as evidence that publishers are going out of business, I see that as a challenge I expect them to meet, just not yesterday!

... creation of a “super” organization that could bring all facets of the industry together to invest in research to find out what is going on in the marketplace

Gee, I dunno, read your P&L maybe?

See where the bigger margin is coming from? Or if that's too complicated maybe go to the only bookstore left (B&N) and observe the deserted aisles and all the folks packed into the attached Starbucks reading on devices.

And now they want to conduct "digital experiments"?

Hope they're not too expesnive, especially since some pretty big experiments have been done already.

..New rules need to be developed in different parts of the supply chain are to work together going forward since the transition will mean that there will be winners and losers. “You can’t use old supply chain rules for the new digital order,”

Seriously? Someone's getting executive compensation for coming up with this stuff?

Joe,by that same rationale, Walmart is also our savior and has made the world a better place. Forget about all the ma and pa businesses they put out of business. I agree about agents and publishers not being helpful. But bookstores encouraged literacy, created book clubs and communities and encouraged reading (at least many indie ones did). Bookstores serve a social purpose too. But normal bookstores don't have billions of dollars of capital for R&D and marketing and biz expansion like Amazon does. Saying they should get with the program is not realistic. A small business owner doesn't have the means and capital that a huge megacorporation does. You want a world of mega corporations only?

I find the argument of Amazon vs. small booksellers equalto the WalMart model vs. mom and pop stores a little disingenuous at best.

I was a buyer for both a major bookseller chain (now defunct) and two small, very independent metaphysical bookstores. In both cases, the amount of profit that those stores made off of books because of publisher / distributor pricing vs. what they made of of everything else was minimal at best. Forget the authors making much at all, unless they agreed to go on tours to promote the book, most often at the author's expense. Walmart actively buys offshore at the lowest price it can get and then often drops a line without notice. We won't even discuss their decision not to carry certain books, DVD's that are edited specifically for their custmer base because it might "offend" some of its more conservative clientele.

Small bookstores do carry books, particularly used and antique or specialty books that are not downloadable in electronic format and further they carry other merchandise, that more often than not, Amazon cannot get - particularly the smaller, specialty shops. I still buy rare and out of print books and will continue to do so, whether or not Amazon is around. I also buy organic or farmers mark-type of foods, which Walmart is not likely to carry.

As Joe sez: It's about adaptation. Walmart only went after the penchant that consumers want the cheapest price and the most convenience and they didn't want to wait. Amazon has innovated on that model as well.

I find the argument of Amazon vs. small booksellers equal to the WalMart model vs. mom and pop stores a little disingenuous at best.

I couldn't agree more. Why does Walmart consistently lose increasing market share to Target? Because the red store offers levels of quality and service that are becoming non-existent at the big blue store.

Miles from the Walmart's and Target's in my town, on the "historic" main street, is a string of specialty clothes, bike, toy and sports stores, all offering products the big chains don't. And they survive just fine in the big box shadows.

Amazon has found a way to do both; discount and specialty books.

As long as Amazon offers the best value, service, products and price they'll be the Great White, deservedly so. But when they spread themselves too thin in the quality department or begin to over marginalize their pricing and service..someone else will start taking their business.

But judging from the people who've actually dealt with them, I wouldn't hold my breath for it.

So, I'll admit I didn't read the 187 comments to see if anyone said this, but old publishing companies are like legacy newspapers. At one point, it was their decision who got read, what was publicized, what was "good enough for publication", etc. There were natural (and possibly some times unnatural) barriers to entry for competitors, and they settled into their niche in the ecosystem and did their best to keep making money.

And then the internet literally made anyone a publisher, their barrier to entry defense was gone, and they are still standing there with dumb looks on their faces wondering where all these new predators came from and why their lunch is being eaten.

It will be interesting to see how it ends. I'm just glad that they weren't able to get a regulatory body to stop it from happening (like car dealers did, for example--ever wonder why you can't just order a car online straight from the factory, pick the color, options, etc? Google "car dealer franchise laws".).

by that same rationale, Walmart is also our savior and has made the world a better place. Forget about all the ma and pa businesses they put out of business.

Walmart started as a ma and pa business too, except Sam Walton was smarter and more innovative. Remember, ma and pa are as greedy as every major corporation in the world, but only a few have the skills to turn their small business in something more. Every bookstore owner would love to be a billionaire, but Jeff Bezos started a website and started selling books in a totally new way. Don't fall into the trap of blaming him for the failure of others.

I would like to recommend the blog piece by Richard Finn, mentioned by himself about midways through these comments.

It's really quite long, and for some parts it may be useful to have some knowledge of business economics... but it gives a really well-thought and balanced analysis on "Is Amazon destroying the competition?" You can Google it with those words, if links are not allowed here. (I'll leave the link last to this post.)

So cheers, Richard. There were a couple of links I will still pursue, but enjoyed your essay.

The "Walmart puts mom and pop stores out of business" argument is very tired. What inherent right does a "mom and pop" store have to charge some single mother twice as much for Pampers than Walmart does? If a mom and pop store offers a better selection of merchandise or more attentive service than customers will still want to go there. More often they are just overpriced and convinced of their right to exist.

Publishing is the same. The big publishers have a huge advantage in marketing. They could market e-books aggressively and build online brands. They could revamp their bloated cost structures and cut costs and revise their model. They have chosen to dig their heels in and pretend things haven't changed. So they will reap what they sow.

Change,yes. The industry has to embrace it. But giving ALL the power to one corporation is not the way.

"Stop you're whining. You're just jealous of our success." Jeez, that sounds familiar. Isn't that what the big banks said when they set to work bankrupting the rest of us? I'm sorry, but too-big-to-fail monopolies are NEVER a good idea.

@Anonymous: Too big to fail? We are talking about a retail business here. Unlike the big banks, who were only interested in growing their own profit margins rather than the more cooperative model that Amazon has given to the writers and independent publishing industry.

I wish I could say that I genuinely feel bad for the publishers that thought nothing was wrong in treating writers so badly are now reaping the reward for having done so. Writers provide content -and publishers are going to have to rethink how they treat them from here on out if they want to find relevancy in the changing marketplace.

They could market e-books aggressively and build online brands. They could revamp their bloated cost structures and cut costs and revise their model.

I think that's Joe's whole point in so many words.

Every mega, multi million dollar, international bestselling book (so far) that's turned into a series, movie franchise, et al, has come from a traditional publishing house. They do possess the capacity to do remarkable things.

There's hundreds of things they could be doing now (or could have done) even though it's a little late in the game.

And they're not.

Instead we're getting vitriol about how Eeviiil (pinky on corner of mouth) Amazon is and how indie work will destroy "real/serious" literature.

Absolutely true. If Amazon does become a monopoly then it will be the doing of the major publishers...by doing nothing to be competitive themselves in the new market. Whining about Amazon for doing a good job makes no sense. What are they doing? Paying authors more? Making books cheaper and easier to obtain? Wow, what a bunch of black hats.

Whine about the publishing industry for having all the advantages and squandering them in return for a couple more years of pretending things are like they used to be. Granted, most publishing execs would like to go live in Mad Men, but that's not a realistic strategy.

@david shutter: thanks for the props. And, I thought your analysis of wallyworld vs the red store was just right... and gave a lot to think about re books e.g. why walmart has good that are often meh and tarjay has goods that are designy often. Something about style...

and back to the quote I put up from the 'new tools' conference held at Random House where O'Leary said, let's get down to business of ebooks.... and do... research. (meh).

The same occurs in med schools and in psychoanalytic circles when there is a huge upheaval. Instead of boots on ground, I am afraid more often it's 'let's have a panel; lets study this.' (quad-jillion meh)

I was one of the first German authors/publishers who started back in 2010 when there wasn't even a German Kindle store.When Amazon started its local one, two things happened.a) the whining of the competiton got louderb) Amazon called (from Seattle!) and was interested my opinion and experiences

I had a German interviewer and he asked if I could write my suggestions in English to his American colleague.Amazon listened. Sounds familiar, huh?